Business Context and Reporting Period
This Form 8-K was filed by MVB Financial Corp. on November 21, 2019. The filing reports the entry into a Material Definitive Agreement between MVB Bank, Inc. (a wholly-owned subsidiary) and Summit Community Bank, Inc. (a subsidiary of Summit Financial Group, Inc.).
Key Financial Metrics
The filing details the financial scope of the assets and liabilities involved in the proposed transaction as of September 30, 2019:
- Deposit Liabilities to be Assumed: Approximately $181 million.
- Loans to be Acquired: Approximately $46 million.
- Other Assets: Cash, real property, personal property, and other fixed assets associated with four branch locations (three in Berkeley County, WV, and one in Jefferson County, WV).
The filing text does not provide a clear value for the total purchase price, as it is calculated based on a formula involving average daily deposit balances, cash on hand, net book value, appraised real property value, and accrued interest, subject to post-closing adjustments.
Material Changes and Transaction Details
The primary material change is the divestiture of four branch locations. The purchase price formula includes an 8.00% multiplier applied to the average daily closing balance of deposits for the 30-day period prior to closing. The transaction is subject to regulatory approval from the Federal Deposit Insurance Corporation (FDIC) and the West Virginia Division of Financial Institutions.
Outlook, Risks, and Management Commentary
Expected Closing: Subject to regulatory approval and customary closing conditions, the parties expect to close the transaction early in the second quarter of 2020.
Risks and Contingencies: Completion is contingent upon regulatory approvals. The agreement includes customary representations, warranties, and indemnification provisions regarding breaches of covenants and liabilities not retained or assumed.
Key Facts for Investor Verification
- Verify the final regulatory approval status from the FDIC and West Virginia Division of Financial Institutions.
- Confirm the final purchase price calculation once the 30-day average deposit balance and closing date asset values are determined.
- Monitor the actual closing date to ensure it aligns with the projected early second quarter of 2020 timeline.
- Review the impact of the $181 million deposit outflow and $46 million loan sale on MVB Financial's future liquidity and loan portfolio composition.